Category: Buying & Selling Homes

Creating Affordable Housing

Together, developers and municipalities can overcome the challenges.

Affordable Housing


Since World War II, the federal government has had its hand in promoting and supporting affordable housing through GI Bills and low-interest financing. These policies and subsidies were very effective in helping returning GIs and other first-time homebuyers get into their first homes. But with rapid economic growth and the Baby Boom, traditional federal subsidies alone have not been able to keep up with the growing affordability gap. Families need safe and decent places to live. Communities need an adequate supply of housing, at all price levels, and businesses need housing that is affordable for their workforce.

Affordable to Buy
The federal government defines housing affordability as housing costs that do not exceed 30 percent of household income. Housing costs are defined as rent or principle, interest, taxes and insurance combined (PITI). If we assume you’re making the 2002 median income of $43,318 (U.S. Census), you would be spending no more than $1,083 per month on housing costs. Now, if we also assume that you are purchasing a home at the 2002 median price of $158,300 (National Association of Realtors), you would need to come up with a down payment of $28,890 to purchase that home and still meet the definition of “affordable.” Of course, there are other factors that influence this deal including mortgage rate, term (length) of the loan, points, and closing costs. Change any of these factors and your down payment or monthly payments could go up or down. And when you factor in points and closing costs, your total cash outlay at closing would be over $33,000! By the government definition, this home may be affordable to own, but with this much cash required up front, would it be affordable for you to purchase?

Affordable to Build
One major factor in affordability is the cost to produce housing. Builder groups often claim — and government statistics support these claims — that home building traditionally leads the nation out of recession. It’s no wonder when you consider that home building benefits not only the trades but also manufacturing, professional services, and even transportation. But the demand for new housing can cause shortages in labor and materials. Delays due to weather or permit issues also add to costs and these costs get passed on to the buyer. Builders of new homes typically operate on fairly narrow net profit margins of 5 percent to 10 percent, so even a small spike in costs can cut drastically into a builder’s profit and increase housing costs to buyers.

An experienced builder can help the homebuyer keeps costs down through careful design and material selection. This process is called “value-engineering” and, as a buyer, it is in your best interest to find a builder who thoroughly understands it. But while the building industry certainly benefits from innovations in materials and methods, the independent builder is generally not able to have much of an impact on overall housing affordability. Think of it this way: A $750,000 mansion, at its core, is built with essentially the same materials as a $125,000, three-bedroom ranch. It’s not just the finishes that make for the inflated price tag.

Bringing Housing Costs Down
One of the key ways to achieve affordability is to increase housing density. Land use regulations at the federal, state, and local levels can have a tremendous impact on housing affordability. Wetlands regulations, for example, take large tracts of land out of the housing market, reducing supply. Local zoning rules that require five-acre plots for each single-family home also add pressure to land supply. There are certain fixed costs to developing any parcel of land, including site planning and permits, roads, power, sewer, and water. All of these costs have to be included in the selling price of the housing that is built on the parcel. If zoning or other regulations limit the parcel to the construction of one house, all of those development costs will have to be borne by that single home, making the price go higher. If zoning regulations allow a higher density of housing—more houses per parcel—the builder can spread the land development costs over all of the housing units, so the same house would actually cost less to build and buy.

Housing Policy for Affordability
Local governments usually jump in when a shortage of affordable housing starts to harm the vitality of the community. In many areas of the country, essential workers such as police, firefighters, medical workers, and teachers cannot afford to live in the communities where they work. Some municipalities are now offering subsidies and other incentives to close the affordability gap and lure workers closer to their jobs. Other measures employed by local and state governments include housing affordability mandates and inclusionary zoning ordinances.

In Massachusetts, for example, Act 40B is a state statute that requires every municipality in the state to have a housing policy with the goal of having at least 10 percent of its housing stock affordable to people earning 80 percent or less of the area median income (AMI). Such measures may require that developers increase housing density to more efficiently use available land. Some rules require developers to make a certain percentage of the homes they build affordable. Act 40B was one of the first such statutes in the country and has been partially responsible for the creation of approximately 18,000 units of housing that meet this level of affordability. Maine followed suit with a similar law. Today there is a growing list of states, in every area of the country, with existing or pending legislation that promotes and/or mandates housing affordability.

There are also a number of nonprofit organizations and programs that specifically address housing affordability. Community land trusts (CLTs), for example, are usually private, nonprofit entities that secure grants and donations to purchase land and housing for long-term affordability. Most CLTs sell the houses but hold the land “in trust” through long-term land leases to the house owner. Most CLT leases require some sort of equity limitation so that when the house is sold, it will remain affordable to the next buyer. Other organizations include Habitat for Humanity, NeighborWorks, state housing finance agencies, and local housing authorities. One relatively new federal program, administered through local housing authorities, allows eligible renters to use their Section 8 housing vouchers to purchase a home. Local banks and mortgage lenders often have the latest information on loan programs for first-time buyers.

Case Study: Community Land Trusts Save Housing
The city of Burlington, a town of about 40,000, is Vermont’s largest city. Despite its stable economy and small-town charm, Burlington has its share of big-city problems: high rents, absentee landlords, aging housing stock, and wages that lag behind rising housing costs. In 1984 city leaders and housing advocates established the Burlington Community Land Trust (BCLT), the first municipally funded CLT. Today it is the largest CLT in the U.S. with over 2,500 members.

A CLT is a democratically controlled community organization that acquires land and buildings and holds the land in trust for the good of the greater community. In terms of affordable housing, this model removes the cost of the land from the housing-cost equation, thereby making the house much more affordable. Additionally, the land trust provides a long-term (usually 99 years), renewable lease to the homeowner. In exchange, homebuyers agree to limit the price of the home if and when they decide to sell it. In many cases, the CLT gets the first option to buy back the house at a formula-determined price. The homeowners get less equity out of the sale, but this limitation ensures that the house will be affordable for the next buyer.

On average a first-time BCLT home is affordable to people at 62 percent of the area median income. On resale, the average BCLT home is affordable to people earning 57 percent of AMI, but the sale brings owners a net equity gain of over $6,000.

Limiting equity may have been a radical idea 20 years ago, but the model has gone mainstream. When the Burlington Community Land Trust was established in 1984 there were only a handful of CLTs. Today there are over 160 in 34 states and others in Canada and the U.K.

Historic Home Buying 101

The pros, cons, and everything you need to know about buying a registered, historic home.

Perhaps you have been searching for several months or even years, and now you have found the perfect home. Your dream comes with elaborately detailed scrollwork, a hand-carved newel post, or stately white columns. It is also listed as a contributing resource to a historic district on the National Register of Historic Places. What does that mean? What things should you consider before determining that this house is for you?

Part of Something Larger
Pacific Union senior sales agent Tom Zannelli of San Francisco indicates that a listing on the National Register is a particular, upscale amenity that attracts a specific group of homebuyers. Others may fall into this possibility during a house hunt. Tom and Lynn Wood, architects and principals of Timeline Architecture, consciously chose to live in their neighborhood of redeveloped military housing at Fort Ethan Allen in Essex, VT. Both the surroundings and the house encouraged residential re-use, while the space offered uncommon design, craftsmanship, and materials. “It was a chance to be part of something larger and unique,” said Lynn.

Return on the Investment
A National Register citation confirms a home’s historic significance, but the real worth may be realized in the stability and strength of the property’s value. A 2000 study of South Carolina home sales showed that homes in Columbia’s historic districts sold 26 percent faster than the overall market; while historic Beauport owners saw a whopping 21 percent greater sale price. In Rome, GA, properties in designated historic neighborhoods increased in value 10 percent more than similar properties without historic designation between 1980 and 1996. Studies in Texas, New York, and Pennsylvania corroborate the positive effect an historic district designation has on property values, with overall increases between 5 percent and 20 percent. The stability of property value appears to extend to owner tenure as well: There is a reportedly lower owner turnover within historic districts than in neighborhoods lacking that distinction.

Playing By the Code
National Register inclusion is an acknowledgment of a property’s importance to its community, state, or the nation. Some homebuyers may be anxious about this designation from the National Park Service, fearing infringement of their property rights. These concerns are unfounded, as long as the work receives no federal money, and requires no federal license or permit. Owners are under no obligation to restore their property, or to open their doors to the public.

Many municipalities, however, have designated design control districts in areas that have been identified as having particular historic, architectural, scenic, cultural, or visual significance. Buildings in these areas may be subject to review for any proposed alteration, addition, or demolition. A prospective homebuyer of a property within an established historic district would be well advised to visit the local planning and zoning office to determine what guidelines may apply to them. Preservation ordinances help homeowners protect their investment by preserving the historic character of their neighborhoods. Review of any project may run the gamut from a cursory evaluation by a zoning administrator to review by a secondary commission that advises specifically on questions of historic sensitivity and architectural compatibility.

For certain types of work, homeowners may need to secure a permit called a Certificate of Appropriateness (COA), or Permit for Minor Work from their planning office or historic review board. Communities that rely on heritage tourism frequently have more stringent review procedures: Historic Savannah requires review for alterations as minor as changing awnings. In New York City’s Row House District, a COA is necessary before changing exterior shutters. Review only applies to the exterior of any structure in a historic district, and does not affect any interior changes.

Some historic district commissions may require replacement of damaged materials in kind, that is, with material or design features original to the building. While the alteration of an historic home may require specific or expensive materials or craftsmanship, it will be balanced with the likelihood that the investment will hold. Additionally, your neighbor’s protected property is also less likely to be altered in a manner that might reduce your property value.

Preservation Resources
In some instances buildings listed as contributing resources on the National Register may be eligible for limited financial aid through grants, loans, or tax incentives. Georgia has provided an eight-year freeze on property-tax assessments on designated historic properties. The federal government currently limits tax credit opportunities to structures that are income-producing (rather than strictly residential). Preservation organizations are another resource for modest financial assistance. Preservation easements may also be arranged through local governments or private organizations like Historic New England (formerly the Society for the Preservation of New England Antiquities). These arrangements can lessen the property-tax burden while providing for the preservation, protection, and maintenance of your historic property. Programs differ from one state to another, so check with your State Historic Preservation Office (SHPO), local planning agency, or community historical society.

Thousands of historic districts have been listed by the federal government on the National Register, ranging from the landmark homes of Newport to modest mill housing of New England. Owning property within a historic district offers you the unique opportunity to interpret and share the history of your home, as steward of a recognized contributor to our nation’s past.

For further information, contact the National Register of Historic Places or your local State Historic Preservation Office.

Consider a Condo for Your Second Home

Vacation condominiums offer amenities and less maintenance, but more restrictions.



Bob Vila’s Home Again opened its fifteenth season with a bay-front condo remodel along the Venetian Island stretch of Miami Beach. This vacation getaway was a remodeling challenge from the start. Gina Kirkpatrick, a realtor with Beach Front Realty, was given a modest purchasing budget to work with and the directive to find something dated. “You know, shag carpet, awful wallpaper, that sort of thing,” she recalls.

She found a one-bedroom, 950-square-foot unit with an open floor plan in the Island Terrace complex, with views of the bay and the luxury homes along Venetian Island. The complex is situated right on the Venetian Causeway, a stone’s throw from the beach and an easy jaunt to the Miami mainland or to trendy Lincoln Road. What’s more, the unit fell well within Bob’s purchase range — proof that you don’t need to be a millionaire to live like one.

This condo was a bargain because the owner was willing to buy into an older building, Kirkpatrick explains. Older units are often roomier with more closets, which means more space. For Bob, taking out closets meant opening up more space. Bob’s unit was in need of TLC, but so was the rest of the building. The timing was good, however, as the current owners had just been hit with a one-time assessment earmarked for a major property overhaul, making this condo an ideal second-home investment.

Condo Conscious
In Miami, second-home owners tend to purchase condominiums over single-family homes. Condominiums provide a host of amenities and low maintenance. “Owners like having a doorman downstairs — the doors are locked, there’s less vandalism,” Kirkpatrick says. And the market has responded to that demand by significantly adding to its inventory. Property values have been known to double in just five years, making a condominium purchase a wise choice for those looking to resell down the road.

In Miami, views are a priority, causing developers to build upward instead of outward. so even mainland properties tend to offer views of Biscayne Bay. The Miami mainland can be a buyers’ paradise, with one- and two-bedroom luxury condominiums with square footage ranging from 850 to 1,500 square feet. In Miami, swimming pools are standard fare, but developers tend to attract new buyers with luxury spas, community rooms, and high-end services. ’

Beware of the Bylaws
Condominium living has advantages, but they come with a price tag. Prospective buyers should inquire about the complex’s association fee, which can run anywhere from $300 a month for a one-bedroom to $600 for a two-bedroom condo in Miami. The higher the square footage, the higher the association fee. Fees cover things like routine exterior maintenance, pool upkeep, building insurance, and front-door security. Plan for the occasional assessment, particularly for older buildings where exterior updates and structural upgrades are more likely.

Condo associations also have bylaws and regulations that dictate what you can do to your unit and how it will be done. Cosmetic changes are typically okay as long as any required city permits have been acquired. Condo associations don’t concern themselves with a wall-color or carpet change. But interior reconstruction is another story, particularly if it compromises a load-bearing wall. Beware of noise restrictions and the hours during which construction can take place. Also inquire about delivery and storage of construction materials, as well as disposal of construction waste and debris. All of this will factor into the cost of your remodeling project.

Second-home owners aren’t year-round occupants, so it’s important to check association bylaws if you plan to rent out your unit. Some places require that owners establish residency for a couple of years, while others may limit the number of months or the number of times per year that the unit can be rented. And some don’t allow rentals at all. Pet ownership is yet another consideration, so do your homework before you buy.

Evaluate the Home Systems

Learn what questions to ask when you conduct an inspection of the heating and cooling systems, insulation, water and electrical service, of your home.

Bob and plumbing contractor Frank look at the 40-year old Dinosaur. Photo: From Bob Vila

So you like the way the house looks and believe the footprint will accommodate your family’s needs. But how does it function?

Let’s examine the house’s infrastructure:

Heating and Cooling Systems
Here are questions you should be asking:

  1. What kind of system is being used?
  2. How old is it?
  3. What kind of condition is it in?
  4. How much does it cost to operate?

I’m not suggesting that you pursue or walk away from a house based on the answers you receive, but it’s worth figuring in the cost of future replacements as you debate the merits of one house versus another.

Common heating and cooling systems include hydronic, warm-air, natural-gas, oil and electric. Let’s take them one-by-one.

Hydronic Systems. Hydronic heating systems transmit heat via hot water or steam. A boiler (powered by electricity, natural or propane gas, or oil) heats the water, which is then circulated by a pump via pipes to the radiators or baseboards of the house. You’re better off with forced hot water than with steam. The cons that come with steam heating are: uneven heat distribution, drying the air, slow response, noise, and inefficiency. Many newer homes will not use steam heat but older houses will.

Warm-Air Systems. Warm-air systems can use electricity, gas, or oil as their main fuel source. The most common warm-air system is forced air. How it works: fans or blowers circulate the warmed air from the furnace through the house. Another type of warm-air system is a gravity system. You know how heat rises? Well a gravity system is based on the likelihood of warm air rising. You’ll find these systems in use mainly in older houses. Their drawbacks, compared to forced-hot-air systems are that you’ll need a huge furnace in the middle of the basement and considerable duct-work. Not only are they inefficient, you can’t run central air-conditioning through them. For these reasons, if the house you’re considering has a gravity system, you should plan to replace it.

Natural-Gas Systems. Heat is transmitted from the furnace to the distribution system via a heat exchanger. To find out how energy-efficient your gas furnace is, you can check the Annual Fuel Utility Efficiency Rating. If you’re evaluating newer equipment, by law it will have a bright yellow “Energy Guide” which will show the anticipated annual cost to operate the unit.

Oil Systems. While a furnace that is powered by oil is similar to one that is powered by gas, the difference is that your fuel will be delivered by truck versus automatically being piped into your house from an outside gas line. Because oil doesn’t burn as cleanly as gas does, oil furnaces require regular cleaning for optimal operation.

Electric Systems. Here’s what’s different about electric systems versus gas and oil systems: Electric systems do not involve combustion and thus do not produce exhaust. Most of the time, electricity will be the most expensive option. There are electrically powered heat pumps, which can both heat and air condition the house. You’ll find them mostly in warmer climates because they’re not sufficient on their own in terms of heating the house’s interior when temperatures fall below 25-30 degrees Fahrenheit.

Heating and Cooling Systems: Costs
When you evaluate a potential house, pay attention to its heating and cooling costs. Energy costs fall just after housing payments and food costs in most household budgets.  You’ll need to know how much it will cost to operate.

Tip: Ask to see at least the last two years’ worth of utility bills.

Not only is it the “green” way to do things, but you’ll save yourself money if your house is more energy-efficient. For minimal or no cost, you can ask the utility company to conduct an energy audit. This audit might suggest insulating the hot water pipes or replacing the furnace, both of which could help reduce your energy costs.

Should You Replace the Temperature Control System?
Depending on what time of year you inspect a house, not to mention unusual weather patterns that could be in effect, you may or may not be able to determine if a house’s temperature control system is working properly. Part of a routine home inspection by a professional home inspector involves testing the heating system by turning it on and letting it run for a few hours (or more on a warm day). Make sure that you find a reference to this test in the inspector’s report. It’s unfortunate, but you can’t conduct a similar out-of-season test on an air-conditioning system as testing an air conditioner in the dead of winter could cause serious damage. If you find yourself in this position, you might want to set aside some of the money in an escrow account for future home repairs.

Don’t make assumptions. That is, a bigger heating and cooling system is not necessarily better—in fact, if it’s too big for the house’s needs, it will be inefficient and expensive. You might be better off with an older system that has been maintained well as opposed to a newer one that has been neglected.  This said, if the maintenance is the same, a newer system will be more efficient, less likely to be a source of trouble, and more likely to still be covered by a warranty.

Of course, if the house’s furnace doesn’t work, you’ll have to replace it. If instead it’s a matter of making your house’s systems more energy-efficient, you’ll need to crunch some numbers before you determine when your investment would pay off. You’ll want to figure in the cost of the replacement, the savings in energy costs, and how many years you anticipate living in the house. First consider more minor improvements such as adding insulation or taking conservation measures.

The House’s Insulation
If you’re considering a house that is exposed to temperature extremes, you should be sure to ask about the insulation.

Questions you should ask:

  1. Is the house insulated?
  2. What kind of insulation is being used?
  3. How much insulation exists in the house?
  4. Where is the insulation located (roof, attic, sidewalls)?

One of the best types of insulation is fiberglass though there are other effective types such as cellulose or foam (rigid foam, foam board, and poured-in foam). If you learn that the house has been insulated with urea formaldehyde (UFFI) or that asbestos insulation surrounds the hot-water pipes, you should investigate this further and make this part of your negotiations with the seller.

The Hot-Water Heater
“You used up all the hot water!” Ideally, this is a phrase that you won’t be hearing in your future home. Your hot water heater should be able to accommodate your needs, such as taking a hot shower while you’re running the dishwasher. What’s important to find out is how long it takes the unit to reheat the water from a starting position of empty.

Oil-fired and gas-fired water heaters are efficient and are quick to reheat. Thus a thirty-gallon holding tank should be adequate for your needs. Electric heaters, on the other hand,  are slower to reheat and therefore are usually accompanied by a sixty-gallon tank. Assess your family’s needs, and if there are teenagers in the house, figure that into the equation!

Water Service and Supply
Where does the water for the house come from? A municipal water system? A well? A nearby lake? (beware of this last scenario as drinking-water problems are likely to be an issue). You should be asking a different set of questions if the water for the house is connected to a municipal water and sewer system versus having its own well.

Questions to ask if it’s connected to a municipal water and sewer system:

  1. Have there been problems in recent times with either the quality or the supply of water?
  2. What does water and sewer service cost? Questions to ask if the house has its own well: a) Has the well ever run dry? b) Has the water been tested recently for potability? If you are considering making an offer on the house, send the water out to be tested by a lab in order to determine that it’s safe to drink. Not only will the lab be able to tell you about safety, it will also tell you if the water is hard or soft.
  3. Is a lot of salt used on the street or road during the winter? (If the answer is yes, you’ll want to find out where the drains are in relation to the water source in order to determine the likelihood of the well’s becoming contaminated.)
  4. Where are septic fields (yours or others’) located in relation to the well?
  5. Are there or were there gasoline-storage tanks near your house? (As old gasoline-storage tanks disintegrate, toxic amounts of petroleum products are released into the watershed and therefore into the well water.)
  6. What is the well’s capacity? (Related questions involve how much water is dispensed, how quickly, how long it takes to refill, and if there’s variability in the supply depending on the season.) Note that if a well doesn’t supply enough water for two showers to occur at the same time during a fifteen to thirty minute period, you should think about buying a larger reserve tank.

Tip: A water capacity test can be conducted by a home inspector or a water-testing lab. There are contractors who specialize in water and septic systems. You should make sure that your Purchase and Sale agreement notes the requirement of a satisfactory assessment of the water supply.

Septic Systems
If the house is served by a septic system, as opposed to being connected to the municipal sewage system, ask the following questions:

  1. How old is the septic system?
  2. Have there been any problems with the septic system?
  3. How frequently has the system been pumped out? (Maintenance that is too infrequent or too frequent can be an issue whereas every two to five years is ideal. An older house with a cesspool and no leaching field will have to pump the system more often.)

Tip: Hire an independent septic contractor, recommended by someone you know versus the broker or seller, to test the septic system. This test will involve pumping out the system to see how much waste there is and running a dye test to confirm that the system is flowing as it should.

If the house’s cesspool is older than twenty-five or thirty years, you may need to replace it with a new septic system.

Whether the house is connected to the municipal system or has its own well and septic system, you’ll also want to find out about the condition of the house’s plumbing to make sure the pipes are to-code, not lined with lead, and not so narrow that they negatively impact the water pressure in the house.

Electrical Service
You should check the number and location of electrical outlets as well as that the service in the house is adequate to meet your needs. This will depend mostly on the number and type of electrical appliances. If it seems that you’ll need to rewire the house, don’t be too concerned as the cost is important but not huge.

A home inspector will be able to tell you:

  1. If the house fails to meet code requirements
  2. If the house is unsafe
  3. How old the wiring is
  4. What condition the wiring is in

The wiring system may use fuses or circuit-breakers.  Either is fine, though it’s easier to manage the newer circuit-breaker system, involving a simple flip of a switch back to the “on” position. But if you keep extra fuses on hand in an accessible spot with a flashlight nearby, and are prepared to change things out yourself, then either system will do.

Evaluate the Home Interior

Follow our guide to inspecting the interior of your home, room by room.

Bob and Gregg walk through a shingle style home. Photo: From Bob Vila

The Floor Plan
Find out how many rooms the house has and whether or not the number will meet your family’s needs. In particular, think about how many bedrooms and bathrooms there are. Is the layout awkward? The house on more than one level? Don’t estimate the room sizes in your head, actually measure their dimensions. Note whether the rooms are bright or dark. If you’d consider expanding the current living space, make sure first that there are no restrictions.

Bathrooms and Kitchens
We can probably all agree that these are the key rooms in the house. Look closely, whether you’re examining how much counterspace there is in the kitchen or if the bathroom has a shower or bath. Check the water pressure throughout the house. Look under the sinks in the bathrooms and in the kitchen for signs of former leaks.

Walls, Ceilings, and Floors
Here’s what you’re looking for: cracks, stains (which will tip you off to past leaks), and peeling paint. This is not the time to be shy—look under rugs to assess the condition of the floors and look in back of paintings to make sure they’re not covering up issues you’re not supposed to see.

Windows and doors get a lot of use in the home.  See if they fit as they should—if they don’t, they’ll get caught and be the worse for wear. Wooden windows and doors expand in the summer and contract in the winter. While this is taken into account during construction, if the house has “gone out of square” or if the condition of the hardware is compromised, the issue will remain. Doors in older houses tend to be too tight or susceptible to drafts. Entrance doors that don’t work properly will be expensive to fix. As for patio doors, problems include streaking and frosting; while newer models use more appropriate materials and succeed better at keeping the heat out during summer and the cold out in the winter, their installation is expensive.

Windows these days are much more advanced than they were in the past. The windows in most old houses don’t work that well. The use of weighted sash cords meant that there were slots in the window frames, which let the winter air in. Not surprisingly, this didn’t help homeowners conserve energy. If you’re trying to tackle leaky windows in an old home, you can cover them with aluminum storm and screen windows. This can look out of place and is expensive but is the best functional approach.

Tip: Beware of steel casement windows. You’re unlikely to come across them but if you do, be forewarned that they’ll cause you trouble, rarely closing tightly, conducting the cold, and condensing moisture. They’re also difficult to find replacement parts for. It’s not a reason to walk away from a house that you’re considering, but know what you’ll be in for.

Details That Make a Difference
As you walk through your potential home, keep an eye out for:

  • Electrical outlets. Make a note of how many there are and where they are located. Think about your specific needs.
  • Closets and storage areas. There’s no such thing as too many closets. Keep in mind that if you bring in a free-standing one, you’ll be giving up 10 square feet of floor space.
  • Skylights. In spite of the aesthetic value that these bring, they also contribute heat from the sun during the summer, as well as leaks if they are the kind without insulating glass.
  • Fireplaces and heating stoves. Look past the charm and make sure there are no hazardous situations.
  • Bulkheads and cellar entrances. It’s convenient to be able to enter your cellar from your yard. But unfortunately, what can enter with you are cold and water, and water can lead to rotting.   If you’re inspecting an older home, the cellar doors are likely to be made of wood, which means that they’ll be heavy and susceptible to rot. You can replace them with steel but you’ll have to hope that standard sizes will fit. You may need to replace the cheek walls too. If you’re dealing with a bulkhead that’s been leaking over the years, the water will probably have reached to the stairs below, causing them to rot. Since it’s extremely difficult to get a proper seal between the cellar walls and the bulkhead opening, you should buy a doorway and door to keep out the cold.

Toxic Environments
Investigate whether any of these toxic situations are at play in the house you are considering:

  • UFFI (Urea formaldehyde) insulation. While this form of insulation is one of the most effective, it was found to be a source of respiratory disease and other health issues in homes where it was not installed properly. Even if you are not concerned, a future home buyer might be.
  • Asbestos. This previously popular form of insulation for pipes is most often found in houses that are over 40 years old. Asbestos becomes an issue if it dislodges and asbestos particles enter the air. Find out from a professional home inspector if there is asbestos in the home. Then look into removing it (not always the best way to proceed) or encasing it.
  • Radon. This gas is released naturally wherever uranium exists in the soil. The presence of radon becomes an issue if it gets trapped inside dwellings. The good news is that it is an easy and inexpensive problem to fix. By improving your ventilation, you can most likely solve the problem. Your home inspector may recommend that you seal cracks in the basement floor and walls.
  • Lead Paint. How old is the house you’re assessing? Lead paint is likely found in houses built before 1940. Between 1940 and 1955, there is still a danger, though less of one. After 1955, manufacturers of paint stopped using a lead base. But it wasn’t until 1970 that the use of lead was banned. It is expensive to remove lead paint. But it must be done if there are young children in the house. And even if there aren’t, you should do it so it doesn’t become an obstacle to your selling the home in the future.

Evaluate the Home Exterior

Here are some tips on how to inspect the roof, gutters, and overall structure.

Exterior Home

Before you buy a home, you should hire a professional inspector to conduct a thorough analysis of the true state of the house, beyond what meets the eye.

But taking a step back for a minute, you can narrow down the field of houses you’re considering by developing a more educated eye. You’ll want to learn how to distinguish between a major structural issue and a minor cosmetic matter. You’ll want to make a list of required and desired changes. Keep that list top of mind when evaluating the asking price of the home and what you’re prepared to offer.

Let’s begin:  

House Styles: Learn about the most common house styles so that you can properly read the real estate listings. You might want to watch my video tours of historic homes in Cambridge or An Architectural Tour of Harvard Square as a fun first step.

“Intake Session”: Pretend you’re a doctor conducting a first physical exam of a patient. Find out as much about the patient’s (house’s) history as you can, such as how long the current owners have lived there, what changes they’ve made, what condition the house’s exterior is in, why they are selling the house.

Roof of the House: Pay particular attention here. Problems with the roof will be expensive to address. Don’t climb up on a ladder to investigate, but ask questions. Find out when the roof was put on the house and what materials were used. Find out if the roof has leaked in the past and if so, how and when it was repaired. Look at the pitch of the roof. Know that a flat roof, or even one with a gentle pitch, can be difficult to waterproof. Find out if the roof has been re-covered with two additional layers of shingles on top of the original layer. This might be a local building code violation and can cause structural issues. If you see water stains on the walls and ceilings, chances are there is a leaky roof. This will mean financial and structural problems down the road. However, don’t be fooled by the absence of water stains as they may have been hidden by a new paint job. Test the ventilation by placing a thermometer in the attic on a warm and relatively wind-free day. If the temperature is 10 or 15 degrees more than what it is outside, you’ll know that there isn’t adequate air flow. This causes problems in summer and winter and can compromise the effectiveness of your house’s insulation.  

Gutters: Determine how well they have been maintained. Neglected gutters become clogged and then rotted, and can lead to a wet basement when backed up water spills out. Look for splits or missing portions of the gutter. This may indicate an ice dam problem, a serious matter that causes ruined ceilings, walls, and floors. Note deteriorated gutters or sealant around chimneys and other elements that project through the roof as these can also contribute to a leaky roof.

Foundation: Find out which material has been used.  Wood is problematic as it’s porous and water can get in. Even pressure-treated lumber which contains water-repellant chemicals lasts just 30-40 years and isn’t meant to eliminate the need for a stone or concrete foundation. Concrete-block was common in the first half of the Century. This is weaker than today’s reinforced concrete foundation and also more susceptible to water. Reinforced concrete is strong and stable. Another common material choice used in older homes is fieldstone, sometimes called “rubblestone.” These irregularly-shaped rocks are joined with mortar. They don’t age well, tend to leak, and can’t be waterproofed.

Tip: Wet basements are common. There are many products on the market to address this, many of which are meant to be applied to the inside of the problem wall. This is not the recommended course of action. Don’t fight water; instead attempt to divert it or install a sump pump to pump it back out in the direction from whence it came. But, remember, if a storm floods your basement, it may simultaneously knock out your power supply, and then your electric pump will be of no use. Best to fix the basic problem and divert the water away from the foundation.

Cracks: Not all cracks in the foundation are causes for worry. Vertical and diagonal cracks are generally harmless, a natural result of settling and the shrinkage of concrete. If these cracks are not more than a quarter of an inch wide, you can probably leave worry at the door. If you spot bigger cracks, however, especially in a house that’s less than 10 years old, you should bring these to the attention of a professional home inspector. It is the horizontal cracks that can be of greater concern as they can indicate negative grading or poor drainage. The worst-case scenario, while rare, involves horizontal cracks in the basement wall which can necessitate rebuilding the foundation. Needless to say, you’d rather not have to do that.

Slabs: Under the floor of the house, slab foundations (pads of concrete) are poured on top of the ground. Slabs make sense if you don’t have to worry about winter frost or a place to put the heater.  But here are some of the negatives: they can crack, they can be cold and hard underfoot in spite of carpeting or tile, they’re not well insulated, and they can make plumbing additions complicated. Plus, if you have a termite problem, you’ll be hard pressed to combat it.

Crawl Spaces: This refers to a way of building on a concrete foundation. For a proper crawl space, the walls extend below the local frost line and stick out at least eight inches above the ground line’s highest point. Whether the crawl space is below the frame of the house or supporting the house’s deck, be sure to look at the footings. These are solid concrete pads that hold the weight of the foundation wall (the wall of concrete supporting the house’s wooden frame). By understanding where they are compared to interior walls, you can understand the structure of the house.

The Soundness of the Structure: OK, let’s have some fun here. Can you draw a straight line? First, stand outside the house, at each corner, and look down the sight line to see if it’s straight.  If it’s an older house and you don’t see deformation of the structure, that’s good. Here’s an entertaining test you can do to judge how much wood a house has in it. Stand in the middle of the room and jump up and down. If the floor moves a lot, there’s a good chance that a wall is missing underneath or the joists are not large enough. Whether or not you have an engineering degree, you can conduct a test to see if the windows and doors close properly or if they are “out of square.” Back to the straight lines—if the ridge of the roof is not perfectly straight, have a professional home inspector find out why. This is the most obvious symptom of a weak house structure.

Now this might surprise you, but if you’re considering a house with structural weaknesses, don’t write it off so fast. Not only can it be corrected, it doesn’t have to be expensive. One word of warning: pay attention to the sills (the wooden members attached directly to the foundation walls upon which the rest of the building sits), especially if the house was built before the mid-70’s when pressure-treated lumber came into more general use and helped keep sills dry. You don’t want to hear the very long list of things that can go wrong when your house’s sills are rotted. I’ll share with you just a few: Sagging floors, windows that won’t open or close in a smooth way, porches that have slipped away from horizontal. While carpenters can handle these problems, fixing them is akin to major surgery. And like any good doctor, they have to diagnose the cause of the problem too to make sure it won’t happen again.

The Remodeled House:  It’s wise to take it slowly before you irrevocably alter an old house, whether you’re changing original materials or the spaces themselves. Not only do you want to do your homework about the style of the house and what changes were made when, what’s worth preserving versus what could stand some innovation, you also want to think about the ways in which people today — yourself included –- live in their spaces and therefore what their needs are in a home. That is, before you tear down interior walls and make one giant space, you might want to think about the cost of heating such a space or about the demand for individual rooms that fulfill different purposes. Beware of prior renovations where corners were cut or poor workmanship was in play. If you have the heart and soul of a remodeler, I’d suggest waiting for an original.

Maximize Your Remodeling Dollar

Make your bathroom and kitchen remodeling jobs pay for themselves and find out where to spend your money best


The average American is said to move every five to seven years. As that statistic suggests, you would be wise to think carefully about how you spend your renovation dollars. The odds are that in the not-so-distant future, you will be trying to recoup your expenditure when you’re getting ready to move on to your next dwelling.

Not every home improvement or renovation will bring a healthy return on investment. So which will enhance the value of your house? Kitchen and bathroom renovations usually more than pay for themselves. Some experts believe that for every dollar well spent in bathroom or kitchen remodeling, the value of the house increases by two dollars, though some studies are more conservative (one recent survey found that on average sellers recouped better than 90 percent of the dollars they had invested in kitchen remodeling). Painting, stripping, and such cosmetic work typically pay for themselves, but other work is less of a sure thing.

The Kitchen: Make a Great First Impression
Most of us, consciously or unconsciously, tend to think of the kitchen as an indicator of the quality of a house. A well-equipped, efficient, and attractive kitchen makes the potential buyer feel immediately at home. Conversely, an outdated kitchen will leave the buyer thinking it’s a problem to be solved. Thus, if you’re planning a kitchen renovation, consider both what you want and need and what will leave future buyers with the best impression.

Quality is important – both for you and them. Durable and attractive materials like stone counters, hardwood cabinets, and imported tile can help convey a sense of the well-made. Make sure you have ample storage and counterspace. Good lighting is important, too, especially over cooking surfaces, the sink, and food preparation areas. In a medium-size or larger kitchen, eating areas, whether at tables or islands, add to the life of a house, involving other family members and guests with the cook’s activities. Brand-name appliances are another good way of conveying a sense of quality.

Bathrooms: Make a Good Investment
Bathrooms are second only to the kitchen in maximum benefit for the buck (according to one survey, better than 80 percent of remodeling costs are recouped on average in subsequent home sales). If you have no bath on the first floor of your multi-story house, a half bath is an excellent investment – both for your comfort and the resale value of the house. Private baths off master bedrooms are also popular, but be wary of an overly large master suite. Some homeowners have discovered the hard way that too many square feet devoted to dressing areas, workout space, and bath-shower-whirlpool combinations can be an expensive waste of space and money. Good tile work and quality fixtures (new or antique) also add value. For a modest investment, handsome towel bars and other hardware can add considerably to the finish. The installation of two sinks can make the new bathroom twice as efficient on a workday morning.

Decks, Windows, Home Offices: Add Instant Appeal to Your Home
In terms of financial returns these projects are next, recouping on average roughly 70 percent of the costs invested. Decks offer indoor-outdoor spaces that add significantly to living areas for minimum cost. Replacing windows and siding can offer considerable energy savings, as well as make the house more attractive. With more and more small businesses being run from home offices, a well-appointed office space can also be a selling point when it comes time to move on.

Floors, Moldings, Woodwork: Choose Good Materials
Whatever the nature of the job, the materials you choose will have an impact on the perceived value of the work. Hardwood floors are good investments. They’re durable, warm, and attractive. After the stripped down starkness of the seventies, moldings, casework, and other woodwork have made a major comeback. Bold cornice moldings can add formality to a room. Chair and picture rails are practical and attractive additions that define surfaces and set off furnishings. Consult with your designer about appropriate profiles and scales for moldings, since they should reflect not only your tastes but the vintage and quality of the existing home.

Money-Saving Tip: Use architectural salvage such as old doors, mantels, and window sash – along with your imagination – to add unique character and a fresh new look to your home at little or no cost.

Lighting: A Little Can Go a Long Way
Individual lighting fixtures can be surprisingly expensive, yet a few new light fixtures may be the most cost-effective way of “remodeling” a house. Without changing anything else, a new lighting design can add drama, convenience, and character to a house. Certain kinds of fixtures can draw attention to themselves, while others are almost invisible but emphasize other elements. Good light can also make your life in the house more comfortable.

Basement and Attic Conversions: Do It Right
If you’re going to remodel spaces downstairs, be sure that the space is light and dry enough. Your remodeling dollars won’t be well spent if the first impression people get is of darkness and damp. Sometimes designers can, however, design imaginative solutions to illuminate downstairs spaces, using a mix of natural and artificial light. If you’re going upstairs, beware of too little headroom. Or of a narrow or steep stairway. If the place is going to feel cramped from day one, consider alternative approaches. Light and ventilation are crucially important, too. Roof windows and dormers can help.

Closets: You Can Never Have Too Many
Think about it: Have you ever heard anyone say they have too much closet space? Unless they intrude on other spaces, closets are always improvements.

Technology, Landscaping, and Other Touches: Think About Future Selling Points
These days, more than one phone line and plenty of phone jacks are a small but appealing selling point (and a convenience while you’re in residence). You might also want to think about setting up a wireless home environment. Modest landscaping involving shrubs, trees, foundation plantings, stonework, or small perennial beds almost always pay for themselves. On the other hand, faux building materials like vinyl siding and fake brick make a house look plastic.

Keep in mind the delicate balance between what you want and what the next owner will need. That tension can sometimes be a tie-breaker in the decision-making process.

Don’t Waive That Inspection Contingency!

Though it may be tempting to remove any possible barrier to your offer being accepted, going so far as to waive the inspection contingency is ill-advised.

Inspection Contingency


With home sales running a solid 12% ahead of last spring, some house hunters are waiving the inspection contingency. So worried about landing a desirable property, The Boston Globe reports, these buyers are choosing to remove every possible barrier to their offers being accepted by sellers.

Temping though it may be, waiving the inspection contingency is ill-advised. Here’s why.

Many homes on the market today are yesterday’s foreclosures. Though some of these have been updated and are in compliance with building codes, others may have received little beyond a coat of paint or some cheap granite counters. Still others may have been rented in the interim, suffering inevitable wear and tear. So without an inspection, there’s no way to separate the good from the gross.

Even if it was not a foreclosure, it’s important to review a home’s history, in part because during the downtown, nationwide spending dropped on home improvement and repair. Did previous owners skimp on maintenance? A thorough inspection is the only way to know for certain.

Last but not least, let’s face it: There are some unscrupulous sellers out there. These “businessmen” slap attractive prices on substandard houses, hoping to palm off lemons on naive buyers. Don’t allow yourself to be taken advantage of: If you submit an offer, insist on there being an inspection contingency.

Would You Live in a Tiny House Village?

The tiny house movement is poised to make a leap forward, with a village development planned for Sonoma County, CA.

Tiny House Village


When is a trailer park not a trailer park? When it’s being designed and developed by nationally recognized small-space living pioneer Jay Shafer. Shafer and his Four Lights Tiny House Company are currently planning a “tiny village” development for Sonoma County, CA.

“The best way to have and use a small house is in a community with other small houses, because that way you can take advantage of many shared amenities,” Shafer explains. “Not everyone needs to own a washer and dryer, for instance, or a lawnmower. It makes a lot of sense for owners of tiny houses to combine resources, which is what we are proposing.”

Related: 11 Tiny Houses We Love

Shafer has been an advocate of the tiny house movement since 1997, when he founded Tumbleweed Tiny House Company, a firm that designs and builds homes as small as 65 square feet. The planned village extends the tiny house concept to include shared amenities and a close sense of community.

[Ed: In July, 2011, we covered Shafer's Tumbleweed Tiny House Co. in Downsizing with Style.]

The development, whimsically dubbed the Napoleon Complex, takes inspiration from quaint old-world villages. Shafer describes the design as having “a very organic layout, featuring winding paths and winding streets.”

He adds, “We are trying to create a sense of community and containment, a sense of being protected, similar to being in a small village in Tuscany.” All of the homes will face the walkway-lined interior of the development, while parking and delivery areas will be located behind the homes.

Tiny House Village - Plan

Village Plan from Four Lights Tiny House Co.

Upon its completion in 2015, the complex will feature 12 to 20 tiny homes situated on a total of two to five acres. Each home, ranging from 120 to 400 square feet, will have a private garden plot and private storage area. Lot sizes are expected to be between 1,000 and 1,500 square feet.

Smaller units are expected to sell for approximately $35,000, with larger units priced up to $90,000. Owners will pay a fee to maintain the shared spaces and amenities.

“The concept is very much based on the idea of homeownership, with everyone owning their own tiny house and their own piece of property,” Shafer says. “People always take care of a space better when they actually own it.”

Local officials have expressed enthusiasm for the project, according to Shafer. To be in accord with zoning requirements, the development is to be classified as a trailer park. “Housing regulations typically require homes of a certain minimum square footage, while the trailer industry does not have these minimums,” Shafer explains. “By designating this as a trailer park, we can work with local zoning to make sure that the community is in compliance.

“Yes, we are calling this a ‘trailer park’, but it will be like no other trailer park you’ve ever seen,” Shafer adds. “Most trailer parks are built fast, cheap, and out of control. Here, we are taking the concept and making it a high-end location for people who want to downsize their homes and simplify their lives. We are not just creating a place for people to stay; we are creating a beautiful community.”

What’s Up with Down Payments?

With the housing market in recovery, 10% minimum down payments on mortgages may become increasingly common.

Minimum Down Payment


For the past several years, 20% has been the minimum down payment for standard loans, but as the market recovers and lenders relax (a little), there’s talk of 10% down becoming more widely accepted.

A lower down payment doesn’t come without hurdles. For one thing, in order to qualify, you are probably going to need a stellar credit score. Another likely requirement will be mortgage insurance, which protects the lender in case you default on the loan.

Related: 10 Things to Consider Before Buying a Foreclosed Home

In a typical agreement between lender and homebuyer, mortgage insurance is not always involved, because with 20% or more down, the lender figures that defaulting will hurt you more than the bank. (Use this calculator to estimate the cost of mortgage insurance in your case.)

Home values are improving, but most economists predict they will not rise rapidly. If you put 10% down, it will take longer to accumulate equity, one result being that you will have less to draw on for a home equity line of credit down the line.

Depending on your situation, a 10% down payment may be well worth the accompanying complications. To be sure you’re making the right choice, however, it’s wise to calculate, and discuss with your lender, the fees and factors attached to different down payment sizes (i.e, 10% versus 20% down).